In looking at your Split Candidates Index, I happened across
Sungard. What do you think of its chart?

Sungard Data Systems (NASDAQ:SDS) has indeed been a bright
spot within the stormy NASDAQ. The provider of IT systems to
the financial community has seen its stock appreciate 88% over
the past year and 23% since the beginning of 2001.

What I like most about the chart on SDS is the fact that
although the stock sold off after its new highs in February,
it did so on light volume and bounced right off its breakout
pivot point. This tells me that investors were confident in
the previous breakout. In fact, in a further show of
strength, the stock has embarked on another attempt at a new
high since the bounce off support.

May I get your opinion on ICOS? I noticed it was just added
to your Split Candidates list and I am looking for a biotech
play.

Like most biotech issues, ICOS Corporation (NASDAQ:ICOS) has
proven to be volatile. Looking past its volatility, however,
we can see that ICOS has also carved out a nice looking
inverse head and shoulders formation.

The head and shoulders formation in ICOS was exactly what we
like to see in this type of reversal pattern minus one key
element. Notice how volume accelerated on the move higher
from the head in late December but dried up on the breakout
move on 1/24/01. If anything, we would want to see volume
greater on the breakout move. This is probably why the stock
stalled after the breakout and hugged its neckline for one
month before making another move higher.

Due to the lack of conviction on the breakout, I would say
ICOS is vulnerable to a sell off. However, the next lower-
risk buy point may present itself if the stock can build a
base around its current level followed by a break and close
above $55 on volume of at least 800,000 shares traded.
Therefore, although the chart is basically encouraging, I
would be patient with ICOS and let the stock prove its
strength before pulling the trigger on this biotech play.